On today’s episode of Full Court Finance at Zacks, Ben Rains dives into all things Zoom Video ZM ahead of its second quarter financial release that’s due out on Monday, August 31. The video conferencing firm has been a star of the coronavirus economy. The question is should investors buy the soaring stock now as a longer-term play?
Zoom Video’s ability to connect people via video, voice, chat, and content sharing has made it a hit among consumers, businesses, and schools during the coronavirus. Zooming has become a common phrase and the firm offers thousands of paying customers indispensable services to continue to conduct business or run classrooms as smoothly as possible amid the circumstances.
Some on Wall Street worried that Zoom would lose momentum as economies reopened. But millions of people in professional services, especially in big cities, are still working remotely and might continue to for some time. On top of that, companies that find the remote environment relativity seamless might cut back on rent and commercial real estate expenses going forward. Zoom also makes a somewhat underrated pitch that might have real legs for the long haul.
Last quarter, ZM wowed Wall Street with blowout results that highlighted its ability to attract more paying customers. Zoom has also expanded its offerings in recent months and it landed a deal that could be a sign of more goods things to come.
Zoom shares have skyrocketed 330% in 2020 to crush Shopify SHOP, Etsy ETSY, Amazon AMZN, Nvidia NVDA, Apple AAPL, and other high-flyers. ZM has also jumped 25% in the last two weeks as it continues to prove resilient to some small hiccups.
It’s worth remembering that Zoom faces competition from Microsoft MSFT, Verizon VZ, and others. Still, ZM holds a Zacks Rank #1 (Strong Buy) right now and earns an “A” grade Growth in our Style Scores system.
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Last year, it generated $24 billion in global revenues. By 2020, it’s predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce “the world’s first trillionaires,” but that should still leave plenty of money for regular investors who make the right trades early.
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